Allowing Sequestration Defense Cuts May Right Our Listing Ship of State

(Photo: UK Ministry of Defence / Flickr)As I illustrated in the chart in my column last week, our defense spending threatens to overwhelm the rest of our budget and threaten the health of our country. Charles M. Smith, a bureaucratic Army hero who tried to keep defense procurement sane and sensible for decades and especially during the Iraq and Afghanistan wars, says that we should welcome the upcoming sequestration as a way to get control of defense spending madness. If you think that we are overstating the case, revisit the chart I had in my last column where all parties are talking about raising defense spending at a time we should be historically winding down the spending. Look at how little the sequestration would actually cut in historic defense spending terms. If you want to know more about the fraud and waste that went on during our most recent wars, get Charles Smith's new book and find out how this man tried his best to save his country from itself.

Dina Rasor, Solutions Editor

My book, "War for Profit," is the story of Army contracting for soldier support during our wars in Iraq and Afghanistan. It is a story of how the needs of soldiers were sometimes subordinate to the need to take care of a large defense contractor. I saw firsthand the waste of about $1 billion from 2002-2005, as documented by my contracting team, the Defense Contract Audit Agency (DCAA) and the Defense Contract Administration Agency (DCMA). These numbers were confirmed in hearings of the House Committee on Investigations held by Henry Waxman and the Democratic Policy Committee through hearings held by Byron Dorgan. Many of the same practices that led to this waste continued from 2005 to the current soldier support contracts. The final total for waste will probably be in excess of $5 billion for just this one aspect of defense contracting.

Defense contractors have strong lobbies in Washington. They work through so-called independent "associations" which support a strong military. They have forged connections with many, if not most, members of Congress, especially those with major defense contractor employment in their states and districts. The military is generally in favor of more spending, though sometimes Congress adds on pork money for pet weapons projects that the military doesn't need and doesn't want. They also try to influence public opinion. The Navy has been running "recruitment" ads which seem a lot like ads to tell the public and Congress how necessary the Navy is to many aspects of national security. And as Dina Rasor's column last week highlighted, the US Air Force uses air shows to wow the public with their planes doing impressive stunts that don't have anything to do with real warfare.

While my story of soldier support contracting and the undue influence of defense contractor KBR on the Army, is important for configuring future such contracts, it is also an important factor in the sequestration debate of the final budget deal. Lacking another agreement, defense and domestic spending will experience significant cuts in 2013. I am distressed that current discussion of this issue often concentrates on how we can avoid the defense cuts - as if there is little concern about the effect of domestic cuts. I find the position is the reverse. United States defense spending can sustain real cuts without sacrificing much in the way of national security. National security is the point of defense spending, although many of the arguments for keeping this spending at current levels, or actually increasing this portion of the budget, now seems to concentrate on defense jobs.

While jobs are very important in the current recession and government spending does create jobs, numerous studies have shown that defense spending is the least efficient way of creating jobs, especially spending for the high-cost systems. Government spending by the states on infrastructure, schools, police and fire protection, supported by federal spending, is more efficient and would provide much needed social value.

I do believe that sequestration is not the optimal answer. The best answer would be for congress and the president to agree on balanced reductions in defense and domestic spending, starting with defense. The reductions should be timed to coincide with progress made in eliminating the current recessionary conditions. We should also look at shifting spending from defense to domestic spending to maintain an effective level of government spending during this economic crisis. Whoever is president in 2013 needs to show leadership in truly evaluating the defense budget for possible reductions.

The United States spends more per capita than any of the top ten spenders on defense, except sparsely populated Saudi Arabia. In the 1980s we felt that we drove the Soviet Union to economic crisis as it tried to match our Reagan defense buildup. The Soviet Union is gone, yet we have continued to spend an incredible amount of our GDP on defense, as if we were immune to the same problems of defense over-spending that struck down the Soviet Union. Now we are in an economic recession, with a significant budget deficit and a large national debt. Yet we are debating mainly how to protect and increase defense spending!

It is apparent from this chart that we are still, as Phil Ochs sang, "the cops of the world." Other countries, which have a huge stake in maintaining peace and security, are, in effect, free riders on United States defense spending. Our allies in NATO spend about one seventh of our per capita defense spending. We spend more than 20 times the amount that India spends on defense. India actually has traditional concerns on its borders with China and Pakistan, while our borders are about the safest in the world.

Brazil continues to grow its economy without the burden of large defense outlays. China, seen by some analysts as a possible enemy, has also followed this path. Additionally it is hard to see China risking its huge stake in United States treasury notes through hostilities. There is an obvious disconnect between our real national security challenges and the amount of money we spend for national defense.

One of the goals of our State Department should be to encourage other nations to become real participants in the struggle for world peace and the security of all states. At the same time our spending on national security should decrease to a reasonable amount, based upon the requirements to counter real threats. Our forces should be re-structured to meet those threats, which do not amount to anywhere near the old Warsaw Pact.

The next question should be where we can cut defense spending. We have obligations to current Army, Navy, Marine and Air Force personnel. Their pay and benefits are not exceptional and would be a poor place to cut. The number of service personnel should decline with the elimination of some of the systems they operate.

Our veterans should also be off limits to reductions in their needed support, considering the sacrifices they have made for our country while most of us were safe at home. We must look at the large systems procurement programs for those opportunities. There are several immediate targets of opportunity:

The F-35 Joint Strike Fighter is the first. According to the Congressional Research Service, "The Administration's proposed FY2013 defense budget requested about $5.8 billion in procurement funding for the F-35 Joint Strike Fighter (JSF) program. This would fund the procurement of 19 F-35As for the Air Force, 6 F-35Bs for the Marine Corps and 4 F-35Cs for the Navy." With additional research and development funding the total 2013 planned cost for the F-35 is $9.2 billion. The current planned total procurement is 2,456.

Last November the Pentagon performed a Concurrency Quick Look Review. The Project on Government Oversight (POGO) obtained a copy and has posted it on the Internet. Concurrency refers to the acquisition strategy of starting low rate initial production while design work was still on-going. New design tools were supposed to mitigate the risks of this strategy. Unfortunately, the report found that problems arising from testing suggested that this was like older programs and concurrency was not appropriate.

Setting aside the concurrency issue, a number of major problems were found with the current version of the F-35. One found on the Navy version was that it couldn't land on a carrier deck. Another was classified and not discussed in the report. What were termed minor concerns included problems with software, weight management (a perennial aircraft design problem) and thermal concerns (the outer covering apparently blisters from the heat generated by high speeds.) Yet, given all this the report takes the party line that none of these problems should cause cancellation!

What is truly amazing is that there is still more important and rigorous testing to be done. The report notes the possibility that such testing will find flaws with "buffet, fatigue life and test execution." The story of this report is that the plane may not fly well, may not have the planned service life and the whole test scheme may not have found other problems. Yet we will spend about $10 billion in 2013.

Navy carrier battle groups should be the next major system examined. The current plan is to maintain 11 carrier battle groups. This flotilla consists of an aircraft carrier, a missile cruiser, several destroyers, an attack submarine and supply/support ships. Buying a group costs an incredible amount of money, as does maintaining one in service. Cost estimates are hard to come by, but the Rand Corporation did a study of the last of the Nimitz-class aircraft carriers. They found:

Nimitz-class aircraft carriers are very expensive ships to build, own and operate.

The procurement cost for CVN 77 will be more than $5 billion. Each Nimitz-class carrier has an average annual operations and maintenance cost of approximately $240 million, slightly less than half of which is for shipyard availabilities. A little less than a third of the annual cost is for the pay and allowances of the approximately 3,000 enlisted and officer ship's company personnel assigned to each carrier.

This does not count the acquisition and operating costs of the rest of the battle group. With rising costs for the new Ford class of carrier we may be talking about $15 billion to acquire a whole group and $500 million in annual operating costs. And yes, part of the acquisition cost will be the final cost of the F-35s discussed above.

Nobody else in the world has even one of these flotillas. The closest to ours are the Harrier carriers and support ships from our British allies. The Chinese just launched their first carrier. They have some, but not all, of the support ships. Unfortunately for them they do not have any aircraft suitable to launch from a carrier. The carrier, itself, is a refurbished ship not designed to be a carrier. It is only suitable for some training. The Russians have some carrier-type ships in the dock at Murmansk. They do not have the money to maintain them, let alone operate them as a credible threat to anyone. Other possible enemies, like Iran or North Korea, do not have anything comparable.

In establishing these carrier battle groups in the 1980s, defense war planning counted on losing two of them in taking control of Murmansk, and using the rest to ensure we could deliver troops and equipment by sea for a war in Europe. That contingency is long gone. Today, carrier battle groups are a very expensive way of "showing the flag," but little threat to terrorist cells that plague our ground troops.

As I stated above, the content and size of our force structure should be determined by the actual threats we face. The experience in Iraq strongly suggests that most of the countries with whom we may come into conflict do not have armies or air forces that could stand up for more than a few days to a small portion of our forces. The old weapon systems in Iran could only fight Iraq to a stalemate in the 1980s. It is doubtful they are any better now. North Korea has little money to put in to development, and will rely on old Chinese and Soviet equipment. So much for the "Axis of Evil."

We can immediately see the consequences of our domestic problems. Decaying schools, infrastructure and cuts in police and fire protection are a major threat. Leaving at risk portions of our population without a minimal safety net is not in accordance with our country's moral framework and is also a threat to provoke social unrest. And our internal decay makes it hard for us to compete with the rest of the world, including Europe and other countries that are relying on us to spend the money being the cops of the world.

What should be done? I suggest the following, based upon the above analysis:

1. We should establish a foreign policy initiative to bring all like-minded countries into the world security business. This will involve increased spending for those free riders on our defense budget. We should consider finally changing NATO from its North Atlantic focus into an alliance that includes countries in South America and Southern Asia who have economic and security interests in a peaceful world.

2. We should conduct force planning that looks at the real possibilities of combat, and determine the force structure necessary to ensure victory should these possibilities arise. The defense spending numbers demonstrate that no potential threat is building a force with any near equality to the one we currently maintain. A force sized for the cold war Warsaw Pact coming through the Fulda Gap and over the North German plains is not necessary. There are real questions concerning the need for Special Forces and relatively cheap drones as opposed to armored combat brigades and F-35 aircraft.

3. We must continue to fight the influence of the military-industrial-Congressional complex. Its corrupting influence is seen in the structure of the sequestration debate and the emphasis on saving the defense budget at the expense of domestic needs.

Taking these steps will improve our domestic situation and offer a real possibility of reducing the deficit and debt in the long run. With thoughtful analysis and a conviction to do the job correctly we should be able to maintain - even improve - our national security position. After over 30 years of working in the defense business and studying defense issues I am convinced that there is a real possibility of significant improvement if our country has the will to stand up and do it.

Dina Rasor is an investigator, journalist and author. Rasor has been fighting waste while working for transparency and accountability in government for three decades. In 1981, Rasor founded the Project on Military Procurement (now called the Project on Government Oversight, or POGO) to serve as a nonprofit, nonpartisan watchdog over military and related government spending. Rasor's most recent book, "Betraying Our Troops: The Destructive Results of Privatizing War," chronicles first-hand accounts of the devastating consequences of privatized war support for troops and the overall war effort in Iraq. She also founded the Bauman & Rasor Group that helps whistleblowers file lawsuits under the federal qui tam False Claims act and has been involved in cases which have returned over $100 million back to the US Treasury.

Charles M. Smith, a little-known, retired, Army civilian employee hero, went up against the Iraq contractor KBR on behalf of the troops and the taxpayers and was demoted. Smith was chief of the Field Support Contracting Division of the Army Field Support Command in Rock Island Arsenal, and one of his main jobs was to oversee the enormous Army contract with KBR during the Iraq and Afghanistan wars. He told KBR he legally would be withholding 15 percent of all payments to KBR until their auditing systems caught up to their spending. His story, as told by The New York Times, can be found here. His new book, War for Profit: Army Contracting vs. Supporting the Troops, is available here.

Allowing Sequestration Defense Cuts May Right Our Listing Ship of State

(Photo: UK Ministry of Defence / Flickr)As I illustrated in the chart in my column last week, our defense spending threatens to overwhelm the rest of our budget and threaten the health of our country. Charles M. Smith, a bureaucratic Army hero who tried to keep defense procurement sane and sensible for decades and especially during the Iraq and Afghanistan wars, says that we should welcome the upcoming sequestration as a way to get control of defense spending madness. If you think that we are overstating the case, revisit the chart I had in my last column where all parties are talking about raising defense spending at a time we should be historically winding down the spending. Look at how little the sequestration would actually cut in historic defense spending terms. If you want to know more about the fraud and waste that went on during our most recent wars, get Charles Smith's new book and find out how this man tried his best to save his country from itself.

Dina Rasor, Solutions Editor

My book, "War for Profit," is the story of Army contracting for soldier support during our wars in Iraq and Afghanistan. It is a story of how the needs of soldiers were sometimes subordinate to the need to take care of a large defense contractor. I saw firsthand the waste of about $1 billion from 2002-2005, as documented by my contracting team, the Defense Contract Audit Agency (DCAA) and the Defense Contract Administration Agency (DCMA). These numbers were confirmed in hearings of the House Committee on Investigations held by Henry Waxman and the Democratic Policy Committee through hearings held by Byron Dorgan. Many of the same practices that led to this waste continued from 2005 to the current soldier support contracts. The final total for waste will probably be in excess of $5 billion for just this one aspect of defense contracting.

Defense contractors have strong lobbies in Washington. They work through so-called independent "associations" which support a strong military. They have forged connections with many, if not most, members of Congress, especially those with major defense contractor employment in their states and districts. The military is generally in favor of more spending, though sometimes Congress adds on pork money for pet weapons projects that the military doesn't need and doesn't want. They also try to influence public opinion. The Navy has been running "recruitment" ads which seem a lot like ads to tell the public and Congress how necessary the Navy is to many aspects of national security. And as Dina Rasor's column last week highlighted, the US Air Force uses air shows to wow the public with their planes doing impressive stunts that don't have anything to do with real warfare.

While my story of soldier support contracting and the undue influence of defense contractor KBR on the Army, is important for configuring future such contracts, it is also an important factor in the sequestration debate of the final budget deal. Lacking another agreement, defense and domestic spending will experience significant cuts in 2013. I am distressed that current discussion of this issue often concentrates on how we can avoid the defense cuts - as if there is little concern about the effect of domestic cuts. I find the position is the reverse. United States defense spending can sustain real cuts without sacrificing much in the way of national security. National security is the point of defense spending, although many of the arguments for keeping this spending at current levels, or actually increasing this portion of the budget, now seems to concentrate on defense jobs.

While jobs are very important in the current recession and government spending does create jobs, numerous studies have shown that defense spending is the least efficient way of creating jobs, especially spending for the high-cost systems. Government spending by the states on infrastructure, schools, police and fire protection, supported by federal spending, is more efficient and would provide much needed social value.

I do believe that sequestration is not the optimal answer. The best answer would be for congress and the president to agree on balanced reductions in defense and domestic spending, starting with defense. The reductions should be timed to coincide with progress made in eliminating the current recessionary conditions. We should also look at shifting spending from defense to domestic spending to maintain an effective level of government spending during this economic crisis. Whoever is president in 2013 needs to show leadership in truly evaluating the defense budget for possible reductions.

The United States spends more per capita than any of the top ten spenders on defense, except sparsely populated Saudi Arabia. In the 1980s we felt that we drove the Soviet Union to economic crisis as it tried to match our Reagan defense buildup. The Soviet Union is gone, yet we have continued to spend an incredible amount of our GDP on defense, as if we were immune to the same problems of defense over-spending that struck down the Soviet Union. Now we are in an economic recession, with a significant budget deficit and a large national debt. Yet we are debating mainly how to protect and increase defense spending!

It is apparent from this chart that we are still, as Phil Ochs sang, "the cops of the world." Other countries, which have a huge stake in maintaining peace and security, are, in effect, free riders on United States defense spending. Our allies in NATO spend about one seventh of our per capita defense spending. We spend more than 20 times the amount that India spends on defense. India actually has traditional concerns on its borders with China and Pakistan, while our borders are about the safest in the world.

Brazil continues to grow its economy without the burden of large defense outlays. China, seen by some analysts as a possible enemy, has also followed this path. Additionally it is hard to see China risking its huge stake in United States treasury notes through hostilities. There is an obvious disconnect between our real national security challenges and the amount of money we spend for national defense.

One of the goals of our State Department should be to encourage other nations to become real participants in the struggle for world peace and the security of all states. At the same time our spending on national security should decrease to a reasonable amount, based upon the requirements to counter real threats. Our forces should be re-structured to meet those threats, which do not amount to anywhere near the old Warsaw Pact.

The next question should be where we can cut defense spending. We have obligations to current Army, Navy, Marine and Air Force personnel. Their pay and benefits are not exceptional and would be a poor place to cut. The number of service personnel should decline with the elimination of some of the systems they operate.

Our veterans should also be off limits to reductions in their needed support, considering the sacrifices they have made for our country while most of us were safe at home. We must look at the large systems procurement programs for those opportunities. There are several immediate targets of opportunity:

The F-35 Joint Strike Fighter is the first. According to the Congressional Research Service, "The Administration's proposed FY2013 defense budget requested about $5.8 billion in procurement funding for the F-35 Joint Strike Fighter (JSF) program. This would fund the procurement of 19 F-35As for the Air Force, 6 F-35Bs for the Marine Corps and 4 F-35Cs for the Navy." With additional research and development funding the total 2013 planned cost for the F-35 is $9.2 billion. The current planned total procurement is 2,456.

Last November the Pentagon performed a Concurrency Quick Look Review. The Project on Government Oversight (POGO) obtained a copy and has posted it on the Internet. Concurrency refers to the acquisition strategy of starting low rate initial production while design work was still on-going. New design tools were supposed to mitigate the risks of this strategy. Unfortunately, the report found that problems arising from testing suggested that this was like older programs and concurrency was not appropriate.

Setting aside the concurrency issue, a number of major problems were found with the current version of the F-35. One found on the Navy version was that it couldn't land on a carrier deck. Another was classified and not discussed in the report. What were termed minor concerns included problems with software, weight management (a perennial aircraft design problem) and thermal concerns (the outer covering apparently blisters from the heat generated by high speeds.) Yet, given all this the report takes the party line that none of these problems should cause cancellation!

What is truly amazing is that there is still more important and rigorous testing to be done. The report notes the possibility that such testing will find flaws with "buffet, fatigue life and test execution." The story of this report is that the plane may not fly well, may not have the planned service life and the whole test scheme may not have found other problems. Yet we will spend about $10 billion in 2013.

Navy carrier battle groups should be the next major system examined. The current plan is to maintain 11 carrier battle groups. This flotilla consists of an aircraft carrier, a missile cruiser, several destroyers, an attack submarine and supply/support ships. Buying a group costs an incredible amount of money, as does maintaining one in service. Cost estimates are hard to come by, but the Rand Corporation did a study of the last of the Nimitz-class aircraft carriers. They found:

Nimitz-class aircraft carriers are very expensive ships to build, own and operate.

The procurement cost for CVN 77 will be more than $5 billion. Each Nimitz-class carrier has an average annual operations and maintenance cost of approximately $240 million, slightly less than half of which is for shipyard availabilities. A little less than a third of the annual cost is for the pay and allowances of the approximately 3,000 enlisted and officer ship's company personnel assigned to each carrier.

This does not count the acquisition and operating costs of the rest of the battle group. With rising costs for the new Ford class of carrier we may be talking about $15 billion to acquire a whole group and $500 million in annual operating costs. And yes, part of the acquisition cost will be the final cost of the F-35s discussed above.

Nobody else in the world has even one of these flotillas. The closest to ours are the Harrier carriers and support ships from our British allies. The Chinese just launched their first carrier. They have some, but not all, of the support ships. Unfortunately for them they do not have any aircraft suitable to launch from a carrier. The carrier, itself, is a refurbished ship not designed to be a carrier. It is only suitable for some training. The Russians have some carrier-type ships in the dock at Murmansk. They do not have the money to maintain them, let alone operate them as a credible threat to anyone. Other possible enemies, like Iran or North Korea, do not have anything comparable.

In establishing these carrier battle groups in the 1980s, defense war planning counted on losing two of them in taking control of Murmansk, and using the rest to ensure we could deliver troops and equipment by sea for a war in Europe. That contingency is long gone. Today, carrier battle groups are a very expensive way of "showing the flag," but little threat to terrorist cells that plague our ground troops.

As I stated above, the content and size of our force structure should be determined by the actual threats we face. The experience in Iraq strongly suggests that most of the countries with whom we may come into conflict do not have armies or air forces that could stand up for more than a few days to a small portion of our forces. The old weapon systems in Iran could only fight Iraq to a stalemate in the 1980s. It is doubtful they are any better now. North Korea has little money to put in to development, and will rely on old Chinese and Soviet equipment. So much for the "Axis of Evil."

We can immediately see the consequences of our domestic problems. Decaying schools, infrastructure and cuts in police and fire protection are a major threat. Leaving at risk portions of our population without a minimal safety net is not in accordance with our country's moral framework and is also a threat to provoke social unrest. And our internal decay makes it hard for us to compete with the rest of the world, including Europe and other countries that are relying on us to spend the money being the cops of the world.

What should be done? I suggest the following, based upon the above analysis:

1. We should establish a foreign policy initiative to bring all like-minded countries into the world security business. This will involve increased spending for those free riders on our defense budget. We should consider finally changing NATO from its North Atlantic focus into an alliance that includes countries in South America and Southern Asia who have economic and security interests in a peaceful world.

2. We should conduct force planning that looks at the real possibilities of combat, and determine the force structure necessary to ensure victory should these possibilities arise. The defense spending numbers demonstrate that no potential threat is building a force with any near equality to the one we currently maintain. A force sized for the cold war Warsaw Pact coming through the Fulda Gap and over the North German plains is not necessary. There are real questions concerning the need for Special Forces and relatively cheap drones as opposed to armored combat brigades and F-35 aircraft.

3. We must continue to fight the influence of the military-industrial-Congressional complex. Its corrupting influence is seen in the structure of the sequestration debate and the emphasis on saving the defense budget at the expense of domestic needs.

Taking these steps will improve our domestic situation and offer a real possibility of reducing the deficit and debt in the long run. With thoughtful analysis and a conviction to do the job correctly we should be able to maintain - even improve - our national security position. After over 30 years of working in the defense business and studying defense issues I am convinced that there is a real possibility of significant improvement if our country has the will to stand up and do it.

Dina Rasor is an investigator, journalist and author. Rasor has been fighting waste while working for transparency and accountability in government for three decades. In 1981, Rasor founded the Project on Military Procurement (now called the Project on Government Oversight, or POGO) to serve as a nonprofit, nonpartisan watchdog over military and related government spending. Rasor's most recent book, "Betraying Our Troops: The Destructive Results of Privatizing War," chronicles first-hand accounts of the devastating consequences of privatized war support for troops and the overall war effort in Iraq. She also founded the Bauman & Rasor Group that helps whistleblowers file lawsuits under the federal qui tam False Claims act and has been involved in cases which have returned over $100 million back to the US Treasury.

Charles M. Smith, a little-known, retired, Army civilian employee hero, went up against the Iraq contractor KBR on behalf of the troops and the taxpayers and was demoted. Smith was chief of the Field Support Contracting Division of the Army Field Support Command in Rock Island Arsenal, and one of his main jobs was to oversee the enormous Army contract with KBR during the Iraq and Afghanistan wars. He told KBR he legally would be withholding 15 percent of all payments to KBR until their auditing systems caught up to their spending. His story, as told by The New York Times, can be found here. His new book, War for Profit: Army Contracting vs. Supporting the Troops, is available here.